High Expectations For Jazz Pharmaceuticals; Will It Post 30% Earnings Growth?

Shares of Jazz Pharmaceuticals plc JAZZ are on the rise on Thursday afternoon, ahead of the announcement of the company’s first quarter financial results.

According to crowdsourced estimates site Estimize, experts and the crowd both expect to see more than 30 percent year-over-year earnings growth from the $1.61 per share (on revenue of $246.9 million) reported in the first quarter of 2014. For the current quarter, the Street anticipates consensus earnings of $2.13 per share on revenue of $309.82 million, while the crowd projects consensus earnings of $2.17 per share on revenue of $310.67 million.

Having said this, the current estimates imply a decline of more than 10 percent from last quarter’s earnings of $2.44 per share, on revenue of $328.14 million.

The chart above features a history of Jazz’s actual earnings compared to estimates over the past couple of years. Although there is no clear trend, the company has managed to beat expectations over the last three quarters.

A second graph illustrates the evolution of consensus estimates over time. As it can be appreciated, while the crowd’s sentiment remained pretty much flat, the Street has been becoming increasingly constructive on Jazz as earnings got closer.

Diverging Views

In a recent research note, analysts at Oppenheimer took a technical look at the stock market “to determine whether investors should follow the old Wall Street adage ‘sell in May and go away.’

According to Oppenheimer, 2015 is setting up to be an exception to the rule,” a Benzinga article reads.

Related Link: Why This Trader Is Worried About Jazz Pharmaceuticals

Also quite recently, CMT Christian Tharp was a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick. In a special segment on the #BestOfBiotech, the trader named a few stocks he was looking at. Among them was Jazz, a stock that worried him.

A recent Benzinga article explains, “Shares of Jazz have escalated over the past year (about 36 percent), or year and a half (about 119 percent). Tharp explained, ‘you have got yourself a test in September, you’ve got a test in November, you’ve got a test in December, you’ve got a test in March… So Jazz… the market is telling me that topside resistance matters. So, that topside resistance sits roughly around $193; we are sitting at $190 [at the time of interview].’”